Enterprise resource planning systems or enterprise systems are software systems for business management , encompassing modules supporting functional areas such as planning, manufacturing, sales, marketing, distribution, accounting, financial, human resource management, project management, inventory management, service and maintenance, transportation and e-business .
The architecture of the software facilitates transparent integration of modules, providing flow of information between all functions within the enterprise in a consistently visible manner.
The evolution of ERP systems closely followed the spectacular developments in the field of computer hardware and software systems.
During the 1960s most organizations designed, developed and implemented centralized computing systems, mostly automating their inventory control systems using inventory control packages (IC) such as COBOL, ALGOL and FORTRAN.
Material Requirements Planning (MRP) systems were developed in the 1970s which involved mainly planning the product or parts requirements according to the master production schedule .
Following this route new software systems called Manufacturing Resources Planning ( MRP II ) were introduced in the 1980s with an emphasis on optimizing manufacturing processes by synchronizing the materials with production requirements.
MRP II included areas such as shop floor and distribution management, project management, finance, human resource and engineering .
ERP systems first appeared in the late 1980s and the beginning of the 1990s with the power of enterprise-wide inter-functional coordination and integration.
Based on the technological foundations of MRP and MRP II, ERP systems integrate business processes including manufacturing, distribution, accounting, financial, human resource management, project management, inventory management, service and maintenance, and transportation , providing accessibility, visibility and consistency across the enterprise.
During the 1990s ERP vendors added more modules and functions as “add-ons” to the core modules giving birth to the “extended ERPs like APS(Advanced Planning system), APO(Advanced Planner and Optimizer), CRM, SCM etc.”
The modules of an ERP system can either work as stand-alone units or several modules can be combined together to form an integrated system.
The systems are usually designed to operate under several operating platforms such as UNIX, MS Windows NT, Windows 2000, IBM AIX, and HP-UX systems.
Enterprise systems employ thin client/server (C/S) technology or client/fat server (C/FS) architecture, creating a decentralized computing environment.
In a C/S system a number of client devices operated by end users such as desktop PCs request services from application servers, which in turn get the requested service-related information from the database servers.
The requests may be simple data files, data values, communication services, transaction processing or master file updates.